The Rise on Government Backed Loans

Can we do this without the government? What I meant to say was, can we make a recovery without their help? I guess the answer to that is both yes and no. What I mean by this, is with the increase of applications in government backed loans, we can be in a really good position to move forward and upward in our economy without needing or getting some sort of bail out.


At least with FHA loans it appears this way. Bill Gross, who operates the largest mutual fund at Pacific Investment Management Company, said that there could be as much as a 4 percent increase in mortgage yields. With that being said, we know that mortgage applications have increased by 12.4% from the previous week, and each week prior to that over the past month applications have gone up. Additionally, Gross said that 95% of mortgages that were closed over the past year, were government backed loans. This means that whether they were purchases or refinances, these loans were backed by Freddie Mac or Fannie Mae. I guess the private sector simply charges too much?

Think about the differences in FHA over the conventional loans. With FHA purchases, you can put down as little as 3.5%, or up to 10% depending on your credit score. This was one of the changes that came this year. With conventional loans, you would need to put as much as 10% to 30% down. A majority of families need the lesser of the two, and it’s critical that consumers know that they have options in these tough economic times. I have been able to help so many families get into homes with the lower down payments, and not only that but being able to direct them in the way of how FHA works. It is important in times like this that your clients understand what options are available, and I can get their loans closed in as little as ten to fourteen days. Who likes to wait?

For more information on FHA loans, and how to get your clients qualified, go to www.fhaloansnow.net and take a look around. I have an FHA calculator there where they can put in the information to determine their affordability and payments, and there is valuable information on guidelines and requirements. You can also email me directly at mdallal@fhaloansnow.net, or call me at 310-498-2700.

-Mayer Dallal